Angela Merkel's Signature Project Is Floundering a Week Into the German Chancellor's Third Term.

BERLIN—Angela Merkel's signature project for the next four years—re-engineering the euro zone—is floundering just a week into the German chancellor's third term.

Other European governments, wary of Berlin's growing dominance in the region, are blocking a proposal by Ms. Merkel that would grant the European Union's executive arm direct oversight of members' economic policies.